Investors reacted positively in May when heavy equipment distributor Finning International Inc. sold its money-losing U.K.-based equipment rental business to an affiliate of Sun European Partners LLP. Now the company (TSX:FTT) is rebuilding its U.K. presence.
It announced August 2 it had been appointed as the Caterpillar dealer for the country of Northern Ireland within the U.K. effective immediately. It also reached an agreement to spend about $5.05 million to buy assets from the administrator of the previous Caterpillar dealership in Northern Ireland.
Separately, Finning is in the “advanced stage” of discussions to buy Caterpillar dealer operations in the country of Ireland outside the U.K. Executives expect to announce that Ireland deal soon.
Finning had sold its Hewden-branded U.K. equipment rental business for about $171 million in May. The U.K. division had previously been most responsible for dragging down Finning’s annual revenue.
Finning generated revenue of $4.74 billion in 2009, down 21% from almost $6 billion in 2008.
Finning’s revenue in 2009, compared with 2008, fell:
The story was similar in 2008 (See “Infrastructure spending, oil sands projects key to Finning’s future” – issue 1009; February 24-March 2, 2009). BIV reported then that, outside Canada, Finning’s 2008 sales were hit hardest in the U.K.
Finning’s U.K. revenue fell 9.1% in 2008 compared with 2007, although Finning attributed the decline to a weak pound sterling. Conversely, Finning’s revenue in Chile, Argentina, Uruguay and Bolivia grew 13.3% in 2008 compared with 2007.
Finning reports its 2010 second-quarter earnings August 12.